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Fairtrade Myths - 3

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"Only a small percentage of the price you pay for a Fairtrade product goes back to the farmer"
This one comes up all the time and is based on the misunderstanding that Fairtrade farmers are paid a percentage of the retail price you pay for a product in a shop — this is not the case.
The retail price you pay as a consumer is determined entirely by the retailer.
While paying farmers and workers a percentage of the retail price might appear a good way to demonstrate the impact of Fairtrade from the consumer's perspective, it doesn't actually address the real inequities in conventional market arrangements.
The way Fairtrade works is that the producer organisation (such as a coffee co-operative) receives the Fairtrade price at the point where they sell to the next person in the supply chain (usually an exporter or importer). This is intended to ensure farmers can cover their costs no matter how low the world price for their commodity falls.

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